As reported by the Seattle P-I and Beverage Business Insights, Jones Soda’s relationship with Starbucks is ending at the end of June. This means that Jones Soda will no longer be available nationwide at Starbucks coffee retail locations…a position that it has held since 2004 in the USA after starting in Canada in 1999.
The official reason is that Starbucks is making room for its expanded food offerings, which the company has publicly said is part of its long term growth strategy. However, people in the beverage industry wonder whether this has something to do with a stronger partnership with Pepsi, with whom Starbucks already has several beverage partnerships and/or distribution agreements.
In any event, it’s not great PR for Jones Soda…losing a retailer as dominant as Starbucks can’t possibly be spun as a positive….but then again what does it really mean for Jones? It was always questionable how big of an impact this relationship actually had on Jones’ sales…I couldn’t find an earnings release that actually put a dollar amount on it. Common sense makes me wonder how good the pull through for CSDs is at a Starbucks….after all, people go to Starbucks to buy Starbucks’ coffee. The intangible, which is arguably the bigger loss, is that Jones Soda was positioned as a premium brand simply for being under the same roof as a brand as powerful as Starbucks….Anyway, I think this ends up being a short term hit, but longer term it’s a distraction that Jones can live without.